Distributor Equity

Manufacturer & Vendors:

What is your Distributor Equity Index? So take the test ...

Independent Healthcare Distributors still control major market share, especially in the non-acute provider markets. Like smaller, privately held businesses in other industries, these distributors face many daily challenges in competing with the "Big Boxes” of healthcare distribution. These challenges are presented by occasionally shallow-thinking customers, unenlightened government regulators, and all too often, by vendor manufacturers posing as our "partners”.

The economic reasons to support more equitable and open competition among your distribution customers seem obvious: more competition means more options for providers and manufacturers, with better service and efficiency downstream. Perhaps more on point, though, do you want to be held ever more captive by a shrinking handful of Big Customers, each with their own agenda (and private label) relative to your products and their own increasingly unilateral demands?

Lots of industry manufacturers pay lip service to "Support of the Independent Distributor”. Obviously they want companies like ours to sell their products because we control market share and are generally much easier (and more enjoyable) to deal with than the Big Distributors. Even after years of consolidation and its often negative impact, maturity of effective master distribution platforms, and some loosening of the restrictions on access to GPO programs, independents still trudge ever uphill on the decidedly uneven playing field.

How can you fairly gauge your support of Independent Distribution? Take the following test to see how you stack up. Find out from others in your organization about policies or processes that can negatively impact competition between your distributors. And for more information on how you can better support Independent Healthcare Distribution, all you have to do is ask.

4. Do you offer exclusive promotions and unpublished buy-ins in which your largest distributors primarily participate, with the discounts offered approaching the likely selling margin in the field?
NO – 10 points

YES – minus 10 points

5. Do any of your measures of individual distributor performance consider per capita results based on population served?
YES – 10 points

7. Is your funding of sales representation for independent distributors in fair and reasonable proportion to your budget for National Accounts personnel?
YES – 5 points

NO – 0 points

8. Do you have a comprehensive relationship with an independent distributor co-op?
YES – 5 points

NO – 0 points

9. Do all your distributors know who to contact in your organization that has the authority to address and resolve significant GPO/Rebate/Contract policy issues?
YES – 5 points

NO – 0 points

10. When disallowed distributor rebates are at issue, do you apply the same criteria to independent distributors as you do for nationals (i.e., the amounts allowed to pile up, or when credit hold is threatened or applied)?
YES – 10 points